First steps on your analytics journey
You are running your business and collecting data, maybe using Xero or another accounting package, perhaps in a CRM system but you know you need to do something with that.
You think “do I need an analytical software package? A data expert, even a data scientist? What is that (or them)?”
No, you already have the package you need to start off – your Excel spreadsheets, and as for the data expert, you have you – no-one else has the deep understanding of your business and its customers. It is that knowledge that is critical to analytics – not models not software but business understanding.
Hmm, so, now to start using my data – but how.
The answer is straightforward: lists. Or, more fully, ordered lists.
These are easily extracted from your accounting systems and organised in excel – list your customers in order of sales, product volume, speed of payment, amount of time they require from you, anything else that makes sense or is otherwise of value or concern to you.
At this point we still have just a bunch of data but have made steps in organising it.
The next step is where we start creating information, possibly new information: we compare the lists.
Is the customer you deal with the most actually one of your slowest payers and not such a high- volume consumer as you thought? Is your biggest customer so big compared to the others in volume and or sales that you are almost wholly reliant on them to keep the business going – looking at numbers 2, 3, 4 and 5 in sales order is there possibilities to grow them and so spread your bets?
By comparing our ordered lists we are identifying key relationships within your data, gaining insights that may have previously obscured by being so busy each day with getting by -
this is analytics, finding meaningful relationships you can use in running your business.
You are now on the road to routinely using analytics successfully for growth, management and profitability every day.
Future posts will include the using wonderful world of charts and graphs to get away from those columns of numbers, dealing with uncertainty, greater sophistication in analysis and how to use analytics to support and inform your marketing: all with an emphasis on you being able to do it with the tools you have on hand.
Let me know what you think and any subjects you need me to address to add value to your business.